China is losing out in iron-ore swaps market

The iron-ore swaps market is booming in Singapore, while Chinese participation is limited because of the renminbi's lack of convertibility and the absence of physical settlement for steel contracts, a source said. "The [renminbi] is not freely convertible and cannot pass through the border, so for a company like us, if we are to go to Singapore for trading, we can only use our overseas-domiciled company," said Chen Dongwei, deputy general manager at Sinosteel Futures. "In this kind of a situation, companies in China without these offshore vehicles cannot participate in the trade."